The oxidation of thiol groups in proteins is a common event in biochemical processes involving disulfide bond formation and in response to an increased level of reactive oxygen species. It has been widely accepted that the oxidation of a cysteine side chain is initiated by the formation of cysteine sulfenic acid (Cys-SOH). Here, we demonstrate a mechanism of thiol oxidation through a hypervalent sulfur intermediate by presenting crystallographic evidence from an archaeal peroxiredoxin (Prx), the thioredoxin peroxidase from Aeropyrum pernix K1 (ApTPx). The reaction of Prx, which is the reduction of a peroxide, depends on the redox active cysteine side chains. Oxidation by hydrogen peroxide converted the active site peroxidatic Cys-50 of ApTPx to a cysteine sulfenic acid derivative, followed by further oxidation to cysteine sulfinic and sulfonic acids. The crystal structure of the cysteine sulfenic acid derivative was refined to 1.77 A resolution with R(cryst) and R(free) values of 18.8% and 22.0%, respectively. The refined structure, together with quantum chemical calculations, revealed that the sulfenic acid derivative is a type of sulfurane, a hypervalent sulfur compound, and that the S(gamma) atom is covalently linked to the N(delta1) atom of the neighboring His-42. The reaction mechanism is revealed by the hydrogen bond network around the peroxidatic cysteine and the motion of the flexible loop covering the active site and by quantum chemical calculations. This study provides evidence that a hypervalent sulfur compound occupies an important position in biochemical processes.